NorthStar revenue hits CA$19.4m in first full year
Revenue for the 12 months to 31 December 2023 amounted to $19.4m. This is some 240.4% up from $5.7m in the previous year, during which NorthStar made its debut.
NorthStar officially launched in May of 2022, rolling out its online sportsbook and casino in the Canadian province of Ontario. Shortly after this was followed by a reverse takeover of the business by Canadian property business Baden Resources.
NorthStar only remained accessible in Ontario until October 2023, when the services were extended to all provinces and territories in Canada. The expansion clearly had a major impact on NorthStar’s performance, with revenue rocketing.
This, Moskowitz says, was helped by a sharp rise in customers as a result of the expansion across Canada.
“We delivered very strong growth in our first full year of operations,” Moskowitz said. “Revenue and customers increased sequentially in every quarter.
“Key accomplishments during the year included the public listing of our shares, numerous product innovations to enhance our online betting platform, a strengthening of strategic partnerships and implementation of a marketing plan that has yielded an excellent return on investment.”
NorthStar hails Slapshot impact
Moskowitz also references the acquisition of Slapshot Media earlier in the year. Slapshot delivers marketing and operational management services to sports betting and igaming operators.
Incidentally, NorthStar used the Slapshot business to support its expansion in Canada.
“The Slapshot Media acquisition has enabled us to expand our addressable market through a First Nations-managed services arrangement,” Moskowitz said.
“Our financial results and KPIs are beginning to demonstrate the strength of our business model. We have the people and systems in place to support considerable expansion.
“As we scale the business, we expect to realise operating leverage as revenue continues to grow faster than expenses.”
Net loss widens despite revenue growth
Breaking down the full-year performance, gaming revenue for the 12 months amounted to $18.9m. This is 231.6% higher than in the previous year, helped by the expansion across Canada. Gaming revenue is drawn from both sports betting and casino.
The other $465,247 in revenue came from managed services or, in other words, Slapshot. As the deal did not close until part way through the year, there were no year-on-year comparables for this area.
In terms of costs, spending was higher in many areas, mainly due to the expansion into more territories. Operator participant fees jumped 207.7% to $4.0m and service provider fees more than doubled to $8.2m.
As for operating expenses, these were 58.7% up year-on-year at $33.8m. The main outgoing here was marketing at $14.1m, only marginally higher than the previous year. However, general and administrative costs hiked 63.8% to $11.3m, while $2.8m was attributed to public listing expenses.
Net finance costs amounted to $1.2m, meaning pre-tax loss for the year hit $25.5m, wider than $20.2m in 2023. However, like in the previous year, NorthStar did not pay tax, meaning net loss was also at $25.5m.
NorthStar extends Playtech partnership
In related news this week, Playtech extended a strategic partnership between its Playtech Software Limited and the NorthStar Ontario subsidiary of NorthStar.
Signed in June last year, the agreement aims to accelerate the NorthStar player acquisition strategy in Ontario. The initial agreement resulted in a total contribution of services from Playtech Software valued at $4.0m.
Playtech Software will now provide similar marketing services in Ontario, worth up to $4.0m and until 31 October this year. Playtech Software will be reimbursed and compensated with a share of revenue from income generated from such marketing initiatives.
Separately, NorthStar has issued a $3.0m unsecured, interest-bearing promissory note to Playtech. This will bear interest of 8.0% per annum and is payable in arrears at maturity.